8 replies to this topic

[.Blizzard]

Chris Laudani Correct me if I'm wrong, but North American auto sales were down last year and are projected to decline again this year. Heavy truck sales peaked. Furniture sales are down, Ethan Allen (ETH) warned yesterday. Home sales are down. Unit shipments of washers, dryers, dishwashers, refrigerators, freezers and microwave ovens are a disaster. Television nowadays is virtually all durable-goods commercials interrupted only by drug and fast-food commercials. (Didn't I see a 1.9% financing offer on a Mercedes last night? Or was it 0.9%?) The cash-out refinancing business has slowed. Next month, homeowners who took out three-year ARMs are expected to see a 60% to 100% increase in their interest rate. (That can't be good.) The Center for Responsible Lending estimates that 2.4 million homeowners will face foreclosure over the next 12 months. Lawmakers in Massachusetts and Ohio are so concerned about future foreclosures that they are considering creating a bailout fund for families that have been duped by predatory subprime lenders. Massachusetts Secretary of State William Galvin wants to create a fund so that the state doesn't face "a whole new wave of homeless people." On cable TV, there are two house-flipper shows -- Flip This House on A&E and Flip That House on TLC. The new season of Flip That House promises to follow a bunch of Yale grads and former Abercrombie & Fitch models flipping homes in New Haven, Conn. San Francisco, I understand, but New Haven? Good luck, guys. With more than 12,000 hedge funds managing an estimated $1.8 trillion, all we need now is a TV show that follows a bunch of newly minted Harvard MBAs starting their own hedge fund. (Tonight on Crimson Alpha, Dirk and Braxton have a heated argument over the 3© exemptions. Will Maddox, the overachieving law review newbie, be able to settle their differences and get the due diligence questionnaires out on time? Stay tuned!) For all you Best Buy (BBY) fanatics out there, I can tell you that 2007 consumer-electronics sales growth is expected to be half of 2006's rate. (And I can point to a whole bunch of retailers that have way too much inventory and are about to get their margins whacked.) We haven't even hit the summer driving season yet, but Jay Leno is making jokes every night on The Tonight Show about how fast gasoline prices have risen in California. (Don't believe me? Take a look. Aren't oil prices above $60 per barrel?) The bulls keep saying that S&P 500 earnings are poised to grow anywhere from 7% to 10%, but is that realistic? I don't think it is, and I don't think it matters all that much. Earnings growth has slowed. The market anticipates the direction of the change. (Investors changed their assumptions. That's why the February/March period got more difficult for most portfolio managers.) For the market to really pick up, the Fed has to change the equation and cut rates. Hoping for a rate cut isn't an investment strategy. Is there anyone out there who believes that first-quarter 2007 GDP will exceed 1.5%? (If the first quarter comes in at 1.5%, it will be the weakest first quarter in four years.) Face it, most of you guys got lucky in the back half of 2006. Oil prices fell and the Fed stopped jacking up rates, so the market took off. (If you recall, nobody made big money in the first half of 2006. It was the second half that bailed out the bulls.) With all the headwinds we face this year, if you're a bull and you didn't beat your benchmark last year, I doubt you have a shot this year.

[atlasshrugged]

ignorance is bliss...dont you know that about bulls!

[.Blizzard]

ignorance is bliss...dont you know that about bulls!

maybe arrogance is your bliss

Enjoy the last ride

[LeroyB3]

It's not that hard to understand. Higher Highs + Higher Lows = Uptrend. Best, LB

[.Blizzard]

It's not that hard to understand. Higher Highs + Higher Lows = Uptrend.

Best,

LB

What are you talking about?

What higher high? we are still below 1460 SPX cash

You will be right if we break that level, not before

For now I see one lower high: 1440 and ...1460 (the high)

[*JB*]

Blizzard -- You might want add trading time frame into your considerations. You seem to be a long term guy, many are IT and ST. Plus, fundamentals are not what matter to TA guys...it's price/volumn/time -- and their derivations. also, the principle of it "always looks worse at a bottom" does apply -- especially to contrarians -- both fundamental or TA types.

Edited by *JB*, 29 March 2007 - 04:32 PM.

[OEXCHAOS]

Not only that, but the worse the news, typically the better the investing environment. Where's that hot real estate money going to go to, eh? If things look like they could be in trouble, do you think the fed might cut, and quick? Strikes me that positioning for a rate cut IS INDEED an investment strategy and perhaps a good one. Now, I'm not exactly a Bull, but I can tell you that the odds of a Bear market starting right now are sliim. The market will probably be surprised by some good news from the housing sector this summer. That'll get your last romp going, and maybe the Fed will think that the problems are gone, tighten and THEN the market will fall apart. But that's just a guess. We don't have the sentiment signature to confidently call a major top in place. Of course, we also don't' have the sentiment signature to call a good low in place yet either. Mark P.S. Good to see you back posting, John.

[LeroyB3]

It's not that hard to understand. Higher Highs + Higher Lows = Uptrend.

Best,

LB

What are you talking about?

What higher high? we are still below 1460 SPX cash

You will be right if we break that level, not before

For now I see one lower high: 1440 and ...1460 (the high)

I'm talking about the uptrend that has been going on for years...not the recent correction that has been going on for almost a month.

Best,

LB

[thespookyone]

Not only that, but the worse the news, typically the better the investing environment. Where's that hot real estate money going to go to, eh?

If things look like they could be in trouble, do you think the fed might cut, and quick?

Strikes me that positioning for a rate cut IS INDEED an investment strategy and perhaps a good one.

Now, I'm not exactly a Bull, but I can tell you that the odds of a Bear market starting right now are sliim.

The market will probably be surprised by some good news from the housing sector this summer. That'll get your last romp going, and maybe the Fed will think that the problems are gone, tighten and THEN the market will fall apart. But that's just a guess. We don't have the sentiment signature to confidently call a major top in place. Of course, we also don't' have the sentiment signature to call a good low in place yet either.

Mark

P.S. Good to see you back posting, John.

I have to say that positioning for a rate cut here is,risky, at best. Aside from CNBC astronauts, does anyone think the Fed lacks resolve against inflation? B.S. interpretations aside-has Bernanke signalled in any way whatsoever that he is pleased with current levels of inflation-or that inflation is of no concern to him? Do the charts of the major commodities look like prices will be dropping soon-not to me. Good news from the housing sector this summer-seems like an even farther reach. By this summer, there will probably be at LEAST a million plus forclosed homes hitting the market-that was just starting to deal with over saturation. Of course, with the subprime blow up,and a much more stern look at 1A buyers, there will be many less buyers this time around. Will the good news be that builders now get to compete, price wise, with homes being forclosed at 30 plus percent discounts-don't see it. It would seem that builders cancelling their estimates for the whole year, backpedaling on statements they made a mere two months ago, and dropping guidance left and right-see the situation pretty clearly. Where does the "hot real estate money" go?=How about ever rising commodities, providing a return "somewhat" better than our market right now. Or, will the percentage gain of the DOW so far this year look irresistable=hmmm,what would that first three months add up to compounded till the end of the year?
I think, instead of hope, I'll trade price-it tends to dictate. Also, extreme worry will help signal the bottom for me-from what I can see at this point, bulls are in the Alfred E. Nueman "what me worry?" mentality, up to and including "the Fed has my back", the largetst bredth day down ever doesn't really mater, subprime isn't that big a problem, and $3.50 a gallon gas won't affect consumer spending. All in all, looks more like a short term top, than a bottom,to me.

Thespookyone

Edited by thespookyone, 30 March 2007 - 08:57 PM.